Mississippi State Insurance Commissioner George Dale says he will make a decision in the next two to three weeks on a proposed 397.8 percent rate increase for thousands of coastal residents covered by the Mississippi Windstorm Underwriting Association.
Nearly 500 insurance companies that write policies anywhere in Mississippi contribute to the association and another option could be to increase premiums statewide.
During a public hearing, Dale said he cannot support the 397.8 percent increase the association has requested for high-risk homes on the coast, an area ravaged by Hurricane Katrina on Aug. 29. The MWUA, commonly known as the wind pool, also requested a 268 percent increase for businesses and a 60.4 percent hike for mobile homes. The wind pool had 16,155 policies before Katrina.
The wind pool was created by the Mississippi Legislature as the state struggled to recover from Hurricane Camille, which laid waste to the coast in 1969. It is intended to provide insurance on property that individual companies won’t cover.
“I publicly stated I don’t want to raise premiums so I will take this information today (and) other information that’s available to me and try to make the best decision I can for the entire state of Mississippi,” Dale said. He said he would consider other alternatives.
Greg Copeland, the wind pool’s attorney, said the increase is not needed to cover damages from Hurricane Katrina, but to buy reinsurance, which is basically insurance for insurance companies.
The wind pool has taken in $188 million since the Legislature tweaked the program in 1987 but has paid out $778 million in that time, Copeland said. He said $175 million of Katrina payouts were made through reinsurance and $545 million was assessed to the wind pool’s member companies.
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